As the regulatory regime for credit unions becomes more relaxed, complex credit unions have become indistinguishable from community banks. Their ability to raise investor capital with 30-year horizons facilitates growth that goes well beyond credit unions’ original purpose.
It made sense in the 1930s for the government to subsidize credit unions by letting them off the hook from paying federal income taxes. Back then, they helped at-risk communities survive hard times by expanding access to credit to those who needed it most. Large credit unions have long abandoned that mission, and today are seeking membership growth—by targeting rich people.